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Finance and Management Services <br />www.santa-ana.org/finance <br />Item # 19 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br /> Staff Report <br />June 17, 2025 <br />TOPIC: Adopt a Resolution Establishing the Appropriations Limit for 2025-26 <br />AGENDA TITLE <br />Resolution Establishing the Appropriations Limit of the City of Santa Ana For FY 2025-26 <br />RECOMMENDED ACTION <br />Adopt a resolution establishing the appropriations limit of the City of Santa Ana for Fiscal <br />Year 2025-26, as required by state law. <br />RESOLUTION NO. 2025-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF <br />THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE <br />CITY OF SANTA ANA FOR FISCAL YEAR 2025-2026 <br />GOVERNMENT CODE §84308 APPLIES: No <br />DISCUSSION <br />The State of California Constitution imposes a limit (“the Gann Limit”) on tax proceeds to <br />be appropriated for expenditures by a local government in any given fiscal year and <br />requires the cities establish this limit by resolution. Adoption of the subject resolution is <br />necessary for compliance with the California constitution for the fiscal year ending June <br />30, 2026. <br />Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of a <br />Reserve Fund for Excess Proceeds of Taxes (Reserve Fund), as a separate accounting <br />of taxes received in a fiscal year prior to the period of expenditure. The City appropriates <br />the expenditure of tax revenue in the same fiscal year of receipt, and therefore creation <br />of the Reserve Fund is not necessary for the fiscal year 2025-26. In fiscal year 2023-24, <br />the Proceeds of Taxes were $322,141,522 and the actual General Fund expenditures <br />were $394,675,261. <br />Using the formula provided by the state, staff calculated the spending limitation from <br />“Proceeds of Taxes” as $1,522,518,198 (Exhibit 1) for fiscal year 2025-26, which is the <br />FY24-25 limit increased by 6.66%. The funds constrained by the appropriations limit <br />include the General Fund, the Capital Outlay Fund, and Special Revenue Funds.